Dover to launch 'independent' AFSL

Non-aligned dealer group Dover Financial Advisers has confirmed it has applied for another AFSL to cater for advisers wanting to meet the Corporations Act definition of "independence".

Dover director Terry McMaster told ifa the dealer group has lodged its licence application with the ASIC and is waiting for approval.

The approval of the second licence – to be called Dover Independent – will allow advisers, across its network, wanting to call themselves "independent financial advisers" to do so, Mr McMaster explained.

He added that there are currently 10 advisers who want to transition over to the new licence once it has been approved.

"The 10 advisers that will be in it are actually from an accounting firm called McMasters which I started and I now only own 20 per cent of – it has always been functionally independent. It has never accepted a commission, it has only ever charged a fee for service," Mr McMaster said.

"But McMasters has always been a bit frustrated that it can't call itself independent... the reason is because it is licensed by Dover... other Dover advisers [can] accept commissions."

Mr McMaster said the new licence will also appeal to other advisers outside of its network who want to become independent as per definition in the The Corporations Act.

However, when asked if this was a means to also encourage accountants looking for a licence to continue offering SMSF advice to join the dealer group, Mr McMaster said this was not something he was looking to do.

"When you look at risk and return, I am not really convinced that having 100 accountant advisers is a good business model in that the fees would not be that high, but the potential risk would be very high because you don't know what they have been doing," he said.

"I wouldn't like to be in an accounting firm right now where they have been recommending apartments in SMSFs for the last three years. And I have no interest at all putting my neck in their noose, which is what you do if you license them."